AOL Time Warner is using much of its ad inventory to cross-promote its products: for example, all those AOL blurbs running on TNT.
According to COO Bob Pittman, the company used up $468 million in ad inventory for cross-promotion in the fourth quarter. That means that 5.2% of the ad revenues at CNN, TNT, TBS,Time
magazine, etc. came from in-house products. The figure the prior year: a mere $14 million.
The figure shows how the ad market flattened AOL Time Warner's TV operations. Faced with unsold time, it sold itself.
In disclosing results last week, AOL said network revenue increased 4% during the three months ended Dec. 31, while cash flow rose just 2%. That's far less than the mid-teens percentage growth the programming units were generating a couple years ago.
Ad sales for Turner Broadcasting's cable networks and The WB dropped 6% during the quarter. At the cable-systems unit, revenue increased a strong 18%, but cash-flow growth was just 13%.
However, growth rates accelerated for sales of both digital cable (now at 3 million subs) and high-speed data (now at 2 million subs).